Introducing in the new century

New Labour

From May 1997, Tony Blair's newly elected Labour government stuck with the Conservatives' spending plans. The Chancellor, Gordon Brown, obtain a surname by some as the "prudent Chancellor" and helped to inspire renewed confidence in Labour's ability to manage the economy following the economic failures of earlier Labour governments. One of the first acts that the new Labour government embarked on was to give the power to set interest rates to the Bank of England, effectively ending the use of interest rates as a political tool. Control of the banks was given to the Financial Services Agency.   

Labour also introduced the minimum wage to the United Kingdom, which has been raised every year since its introduction in April 1999. The Blair government also introduced a number of strategies to cut unemployment, including an expansion of the public sector. Unemployment was constantly below 1.5 million during the first half of the 2000s, this data was a level not seen since the late 1970s, although the government never succeeded in getting unemployment back into the six figure tallies which were seen for most of the 30 years after the end of World War II.

New century policies

At the beginning of the century the Labour Party increased taxes and borrowing, all of it to obtain money to spent in social policies, in special public services as the improve of the National Health Service, which in the past suffers a notable rate of under-funding.

The economy shifted from manufacturing, which had been declining since the 1960s and grew on the back of the services and finance sectors, while the public sector continued to expand. The country was also at war with first Afghanistan, invading in 2001 and then Iraq, in 2003, this last proved controversial with the British public. Spending on both reached several billion pounds a year and the government's popularity began to slide, although it did manage to win a third general election under Blair in 2005 with a reduced majority. Blair stepped down two years later after a decade as prime minister to be succeeded by the former Chancellor Gordon Brown, the change of leader coming at a time when Labour was starting to lag behind the Conservatives (led by David Cameron) in the opinion polls.

The legacy of Gordon Brown´s policies. Rising from crisis to world power-

Car evasion

By this stage, unemployment had increased slightly to 1.6 million although the economy continued to grow, the UK was continuing to lose large numbers of manufacturing jobs due to companies encountering financial problems or switching production overseas to save labour costs. This was particularly evident in the car industry, with General Motors and Ford having significantly cut back on UK operations, while Peugeot (the French carmaker who had bought the former Rootes Group and Chrysler Europe operations in the late 1970s) had completely withdrawn from Britain. These closures resulted in thousands of job losses, although the biggest single blow to the car industry came in 2005 when MG Rover went into liquidation. In Britain a lost of workers are employed by this firms, so the evasion and delocalisation of the production, caused an increase in the unemployment and rise the angriest of the population against the politics. This was the largest collapse of any European carmaker in modern times.      

INTERESTING LINKS:

Speach of Tony Blair about Iraq Invasion: Video link
Timeline of Iraq war by BBC: Article link